The Employees’ Provident Fund Organisation (EPFO) is moving to return long-unclaimed savings to members, starting with small balances in inactive accounts. A new auto-settlement system is being rolled out to send money directly to bank accounts, cutting out the need for claims in certain cases.

An EPF account is marked inoperative when no contributions are made for three years after a member turns 55 or retires, whichever is later. These accounts stop earning interest after that point.

For those below 55, however, interest continues to be credited until the age of 58, even if no fresh contributions are made.

As of early 2026, there are about 31.8 lakh inoperative accounts holding ₹10,181 crore in unclaimed funds. A significant portion of these accounts has been inactive for years:

  • Around 7 lakh accounts are over 20 years old
  • 1.8 lakh accounts fall in the 10–20 year range
  • Nearly 13 lakh accounts have been inactive for 5–10 years

Auto-settlement plan and who is covered first

EPFO has approved a pilot to automatically settle claims for accounts with balances of ₹1,000 or less. In this phase:

  • Around 1.33 lakh accounts will be processed
  • About ₹5.68 crore will be credited directly
  • No claim application or additional paperwork will be required

Funds will be transferred to Aadhaar-linked bank accounts already registered with EPFO.

Alongside this, the organisation is preparing a broader system to handle Aadhaar-verified inoperative accounts. Around 8.1 lakh such accounts, holding nearly ₹5,200 crore, are expected to be included in future phases.

Within this group:

  • About 14,000 accounts have over ₹5 lakh unclaimed
  • 38,000 accounts hold ₹1–5 lakh
  • 41,000 accounts have ₹50,000–₹1 lakh

Members who joined after October 2017 are likely to be prioritised as the system expands.

What employees should do next

For small balances (₹1,000 or less), no action is required if bank and Aadhaar details are already linked. The money will be credited automatically once the system is operational.

For others, especially those with higher balances, the auto-settlement facility is still being developed. EPFO is expected to use learnings from the pilot to extend the system further.

The move is aimed at speeding up payouts, reducing delays, and simplifying access to savings that have remained untouched for years.

Separately, EPFO is also working on a system to allow withdrawals through the Unified Payments Interface (UPI), targeted for rollout by April 2026. If implemented, this could benefit around eight crore members by making withdrawals faster and less dependent on lengthy claim processes.